Don’t Blow It

March 23, 2010

Texas’ wind power prowess is well known: Turbines have been popping up in West Texas like weeds, and the state now leads the rest of the country by a wide margin, with three times the amount of wind power installed as the next closest state, Iowa. But renewable energy sources other than wind have lagged here. Despite blazing sunlight everywhere, Texas has not even cracked the top 10 in terms of states with solar panels connected to the grid, according to a Solar Energy Industries Association report last year. Biomass (combusting wood chips to generate steam, which turns a turbine to make electricity) and geothermal (using heat from the below the ground to create energy) are also nascent.

Regulators are poised to do something about this. The Public Utility Commission is mulling a shot in the arm to the renewables industry, as it is to energy efficiency. Sometime after a March 31 public workshop, the commission is expected to put forward a formal proposal that could require the state to develop 500 megawatts of non-wind renewables by the end of 2014. That equates to barely 5 percent of the amount of wind capacity already on the Texas grid but represents a leap for technologies that are almost invisible in the state today. “It’s a big number,” says Michael Webber, the associate director at the Center for International Energy and Environmental Policy at the University of Texas. There is less than seven megawatts of solar power in Texas right now, Webber notes.

Efforts to go big have so far fallen short. The Legislature tried to pass its own version of renewables assistance last session, and advocates got so optimistic about the dozens of bills promoting solar power that they dubbed it the “solar session.” Yet just about everything failed to pass. This not only disappointed solar installers but dashed hopes of attracting a run of solar panel factories to the state. “We’re much more likely to build a manufacturing industry for solar if we have a market for solar here,” Webber says.

The regulatory push for new renewables would use essentially the same type of incentives that have propelled wind power. Wind surged beginning in 1999, thanks to the clunkily named “Renewable Portfolio Standard,” which required Texas to get 2,000 new megawatts of electricity from renewables by 2009. Once Texas utilities and wind generators got the idea, they quickly surpassed the requirement, and the Legislature came back with a stronger goal in 2005: 5,880 megawatts by 2015. That, too, has long since been exceeded: Texas has more than 9,000 megawatts of wind already installed.

The PUC has already put forward a “strawman” proposal for promoting non-wind alternative power that would require 50 megawatts (one-tenth of the 2014 amount) to come from solar power. The “strawman” designation means that it is not yet a formal proposal but rather a placeholder that can draw early comments.

The solar option seems to have support on the PUC. “We’re going to try to do some more on sun,” Barry Smitherman, the chair of the commission, told an audience at a Renewable Energy World conference in Austin last month.

A number of other states that have renewable energy mandates — including New Jersey, Illinois and Massachusetts — also direct a specific portion of their requirements toward solar power, a technology viewed as promising but currently expensive.

David Power, deputy director of Public Citizen Texas, worries that, without a carve-out for solar power, “it would just be all biomass. It would be fairly easy to throw up a couple of 250 megawatt biomass plants and just start burning trees.”

Texas’ struggling pulp industry is also worried about a glut of biomass activity. In a filing to the PUC, the Texas Forest Industries Council, which represents pulp and paper mills, wrote that the amount of woody material “is not sufficient to supply both the existing wood products industry and a new biomass power industry.”

Texas does have a modest supply of existing renewables. It had a number of dams and, in the last decade or so, has added 33 more megawatts of hydropower, 40 megawatts of biomass and 80 megawatts of landfill gas, according to the Electric Reliability Council of Texas, which operates the grid. (These measurements are voluntary and therefore may be incomplete. The ERCOT number for solar — 1 megawatt — is particularly likely to be off, because ERCOT does not usually count rooftop generation.)

More renewables are on their way. Austin Energy, for instance, is building a 100-megawatt plant in Nacogdoches. Geothermal could also enter the mix. Three years ago a Nevada company called Ormat Technologies won an auction for the state of Texas’ first geothermal leases.

The Legislature tried to encourage non-wind renewables even before last session, but an astonishingly arcane language issue has stood in the way. In 2005, when the Legislature raised the bar for wind, it also included a 500-megawatt non-wind target. But the PUC has not forced utilities to carry this out because the agency has so far interpreted the word “target” as being voluntary. A new PUC rule is expected to make sure that the target becomes a requirement, and also provide details on out how companies that sell electricity go about implementing it.

State Sen. Kirk Watson, D-Austin, who authored a renewables bill last session, said he believed that the PUC “does have statutory authority to do this based on current status of law.” The efforts last session, he added, helped lay the groundwork for the current PUC effort.

Many details of the agency’s proposal are being vigorously debated. The Solar Alliance, for example, wants the PUC to raise the penalty for noncompliance to prevent electric companies from buying their way out of the requirements. NRG Energy, which owns the retail business of Reliant Energy of Houston, wants implementation of the mandate to be delayed. The “strawman” proposal would have electric companies hit an interim 100-megawatt non-wind goal by the end of this year; NRG wants the date for initial compliance pushed back to 2012.

Other points of contention include which existing non-wind facilities can be covered and whether or not projects built by municipal utilities — such as Austin Energy’s coming biomass plant in Nacogdoches — would qualify.

If the PUC proposal goes through — and Power of Public Citizen Texas thinks that it has a “screamingly good chance” of being approved by the three-member Commission — renewables advocates will move on to other, higher goals. Environmentalists, for instance, want to see mandates for 4,000 to 5,000 megawatts of non-wind renewables.

Watson, whose bill last session would have required 1,500 megawatts of renewables other than big wind projects by 2020, pronounced himself “very pleased” with the PUC proposal, and said he would wait to see what emerged before deciding whether further legislative action was needed. “This is a great first step, and I’m hopeful that the commission will go ahead and move forward on the rulemaking,” Watson said.